More than 400 big and small retailers have joined forces to urge Congress not to repeal the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, arguing a repeal will significantly hurt global credit and debit card companies’ anti-competitive measures.
In a letter to Congress, the group said the reforms increased the competition in the marketplace, because credit card companies could no longer prevent competitors from having a shot at processing debit card transactions and price-fix the fees big banks can charge merchants for those transactions, the retailers said in a press release. The group contends the Durbin Amendment ensures card companies compete on price and security. They said the reform stopped Visa and Mastercard from giving banks money to block competing card companies. The House Financial Services Committee is currently mulling legislation that would remove the reforms as part of a broader aim to repeal Dodd-Frank.
“Repealing the debit card reforms would benefit no one but huge card companies and the largest of the large banks, which will be able to exploit again their unfair advantages in this market and subvert free-market principles,” the group of retailers said. “As cornerstones in the business community, we are staunch supporters of free enterprise and generally do not support any market intervention unless markets are not functioning efficiently. Credit and debit card acceptance is a prime example of a nonfunctioning marketplace.”
The group of retailers went on to say that, if the debit reform was repealed, global credit card companies would get a bigger “stranglehold” on the debit card marketplace, which would result in less choice and price-fixed fees at what they say would be “massive markups.”
“Debit card reforms have been a major step in the right direction,” the companies wrote in their letter to Congress, “and any removal of those reforms would be a monumental step in the wrong direction for U.S. businesses and consumers.”